* Zenn awaits production-quality battery

* No deadline set to get EEStor battery

* Key focus moves to electric car drive trains

* Will not sell its own highway-capable electric car

By Susan Taylor and Nicole Mordant

TORONTO, Sept 22 (Reuters) - Zenn Motor Co says it is on the verge of a battery breakthrough that could drive the tiny Canadian company into the automotive big leagues, but not as a maker of electric cars.

Zenn now makes low-speed electric vehicles, but in an apparent shift in strategy, Zenn Chief Executive Ian Clifford said on Tuesday the company no longer plans to distribute or sell its own highway-capable electric vehicle, partly due to an increasingly competitive market.

"The way things have really changed over the last year -- there have been such dramatic shifts and focus on electric vehicles -- it doesn't make a lot of business sense for us to go into the distribution and sale of the vehicle," he said.

Instead, Zenn thinks it has a better crack at mass markets by supplying auto equipment makers with an electric car drivetrain, which generates and delivers power.

To do this, Toronto-based Zenn is banking on EEStor Inc, a low-profile, privately held U.S. battery-maker, to deliver technology that will make electric cars faster, more powerful and able to travel longer between charges.

Zenn has invested $7.5 million in EEStor and has a 10.7 percent stake in the company. To date, EEStor has met three of the four contract milestones tied to Zenn's funding.

Clifford said the final milestone is the ultimate proof point: delivery of a production-quality energy storage unit, or battery, that meets precise criteria.

The battery promises to power a car up to 400 kilometers (250 miles) at speeds of up to 125 km/h (80 mph) on a five-minute charge.

"We are working on a daily basis with EEStor on this final milestone - this very, very critical milestone - because it takes us to commercial viability," he said.

The problem is that Zenn has no say on when Texas-based EEStor must deliver the technology on which Zenn's future hinges.

"I have faith," said Clifford, who invested his windfall from an Internet marketing business in Zenn. "You'll see, as we announce things and position the launch of our solution, I think our direction will be very clear."

While he's waiting for EEstor, Clifford is talking to auto equipment manufacturers about Zenn's planned drivetrain system for electric cars. Zenn has exclusive rights to sell EEStor technology for mid-sized vehicles weighing up to 1,400 kilograms (3086 pounds) and to retrofit any vehicles over one year old.

Zenn will develop a "proof of concept" highway-capable car that it can use as a demonstration to carmakers.

The company said it will also shift focus away from the low-speed car it currently sells. Selling for about $16,000, the car has a top speed of 40 km/h (25 mph).

Zenn, whose name stands for "zero emission no noise", stock was off 13 Canadian cents at C$5.95 on the TSX Venture Exchange on Tuesday. Over the last 12 months, the shares have gained more than 70 percent.